The head of Sprint Nextel's prepaid unit, Boost Mobile, said the carrier won't get pulled into a prepaid price war in the wake of rival MetroPCS' decision to cut the price of its unlimited plan.
"We're not going to get into a price war," Boost President Matt Carter said in an interview with the Associated Press. "We don't believe price alone is the only thing that drives our purchase behavior here."
Yesterday, MetroPCS unveiled a monthly prepaid plan at $40 for limitless voice, texting and Web access. The move caps months of back-and-forth on the issue; Boost shook up the industry earlier this year with the introduction of a $50 per month prepaid plan that includes unlimited voice, texting, Web access and Nextel walkie-talkie support. A few weeks ago, TracFone Wireless undercut that price with unlimited voice, text messaging and 30 MB of data for $45 per month, running on Verizon Wireless' network.
The issue is critical for Boost and parent Sprint. Indeed, Boost provided Sprint with 777,000 net prepaid subscribers in the second quarter, helping to offset Sprint's loss of almost a million postpaid subscribers in the quarter.
Despite the lowering floor for unlimited prepaid, Boost's Carter said the carrier currently has no plans to cut its pricing, but that it would instead focus on making sure its outdoor advertising emphasized the $50 price point. He also said he could not comment on how Sprint's recent acquisition of Virgin Mobile USA would affect Boost. Under the recently announced transaction, Sprint will acquire Virgin Mobile for$483 million and Virgin Mobile CEO Dan Schulman will run all of Sprint's prepaid operations. Carter will report to Schulman.
In related prepaid news, J.D. Power and Associates released a new survey on customer satisfaction that showed MetroPCS dropping from first place to last place. Boost came in third in the rankings, behind Net10 and TracFone.
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